Implementation of tariff increases on China – Section 301:
There have currently been three rollouts of tariff increase on Chinese origin goods by the United States Trade Representative (USTR) in 2018. What is commonly called the “Annex A” is comprised of over 5,700 full and partial harmonized tariff codes of the United States (HTSUS). Annex A carries an additional 25% duty rate on top of the original duty rate of the applicable HTSUS code. The list of the first two sets of HTSUS codes were published in the Federal Register 83 FR 40523 found here: https://www.gpo.gov/fdsys/pkg/FR-2018-08-16/pdf/2018-17709.pdf
The third roll out of tariff code increases went into effect on September 24, 2018 (list was made available on September 21, 2018) that included an additional 818 HTSUS codes to see tariff increases from Chinese origin goods. This third roll out is a bit different from the last two. The articles covered by this list is only subject to an additional 10% ad valorem duty rate for the remainder of 2018. On January 1, 2019 the 10% duty rate will increase t0 25%.
List of HTSUS codes for the third round of HTSUS codes: https://www.cbp.gov/sites/default/files/assets/documents/2018-Oct/Section301_HTSUS_Ref-Guide_Oct2-2018.pdf
Chapter 99 use
The additional ad valorem duty rate for Chinese is origin goods is applied by the additional use of chapter 99 HTSUS codes along with the correct HTSUS code for the goods being imported into the United States.
The first list round of HTSUS codes that went into effect on July 6, 2018:
9903.88.01 adds 25% ad valorem additional duties
The second list round of HTSUS codes that went into effect on August 16, 2018:
9903.88.02 adds 25% ad valorem additional duties
For the third round of HTSUS codes that were covered on the September 21, 2018 list:
9903.88.03 covers subheadings listed in US Note 20(f) to subchapter III or Chapter 99
9903.88.04 covers all subheadings listed in U.S. Note 20(g) to subchapter III to Chapter 99
Remedies to duty increases
Duty minimization can still be achieved when chapter 98 HTSUS is properly claimed on merchandise covered by the Section 301 tariff increases. When submitting an entry against chapter 98, the filer must first report the applicable chapter 99 subheading, followed by the applicable chapter 98 subheading, and finally the classification of the commodity that falls between chapters 1-97.
The caveat for this is for goods entered under headings 9802.00.40, 9802.00.50, 9802.00.60 and 9802.00.80. For the subheadings 40, 50 and 60, the additional duties apply to the value of the repairs or alterations as per normal procedures. For subheading 80, the additional duties apply to the value of the article less the cost or value of such products in the US.
Section 301 duties are eligible for duty drawback.
There are no waivers or exclusion requests for companies at this time. Product exclusion request period ended on October 9, 2018. Any product exclusion admitted by the government will be in effect for one year upon publication of the exclusion list and will retroactively apply back to July 6, 2018.